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UK property demand up slightly in November, says RICS

Some 7% more surveyors reported new buyer enquiries rose rather than fell during November, the RICS UK Housing Market Survey for November 2011 shows.

This was the third consecutive monthly increase for the series, and RICS says this is a good indicator of buyer demand in the market. Although the pick up in interest signalled by the results is still modest, this is the first time since the spring of 2010 that the series has been in positive territory for three months in a row, it adds.

The improved tone to buyer demand was also reflected in an improvement in the level of sales transactions. Newly agreed sales rose, with 14% more respondents reporting sales increased rather than decreased, compared with 9% more in October.

Alongside this, the average number of sales per surveyor, per branch, climbed to 15.4 in the three months to November. Although still very subdued, this is the best level since September 2010.

During November, surveyors were again asked about the factors which they felt were holding back activity in the housing market. Most cited was uncertainty in the economy and this reason was given by 89% of respondents, compared to 79% three months ago.

Availability of mortgage finance came in at 70%, while fear of house price falls remained steady at 42%.
The house price balance continues to be negative, with 17% more chartered surveyors reporting price declines rather increases in November, although this is an improvement from October’s reading of -24%.

Significantly, close to three-fifths of surveyors indicated that prices had not changed over the month and of those reporting a fall; the vast majority indicated that it had been in the 0 to 2% range.

Looking ahead, it remains a broadly similar story to that signalled for much of 2011. Price expectations remain barely changed at -21% while the net balance for sales expectations is still in positive, albeit low, territory at 5%.

‘It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets. However, a meaningful recovery still seems some way off,’ said RICS housing spokesperson, Alan Collett.

‘While the proposed mortgage indemnity scheme is clearly likely to provide some assistance for the market and is to be welcomed, its focus on the new build sector will inevitably mean that it only offers support for a relatively small share of the market,’ he added.

The RICS survey is the longest running monthly survey of house prices in the UK, collecting data since January 1978.  The survey is cited by the Bank of England's monetary policy committee at its monthly interest rate setting meetings.